Ofcom change TV advertising rules
Ofcom has removed rules that forced Channel Five, Channel Four, and ITV1 to sell off their advertising minutes, which could allow broadcasters to bring in millions of additional pounds in revenue from advertisements every year.
Ofcom outlined the decision back in January and approved it on a provisional status in March that will remove the rule that forces networks to sell ad minutes after fears that PSB broadcasters would hold slots in an effort to raise the prices.
PSBs can run about seven minutes of ads every hour and now they could change the price they charge advertisers for that time period by drastically reducing how many ads they show.
The impact of the strategy however has been reduced dramatically by the introduction of digital television channels.
Channel 4 and Channel Five could still reap the benefits of the ruling by millions of pounds every year as they gain more control over the way they choose to sell television ads.
ITV on the other hand will have less room to do the same as contract rights renewal procedures will keep their advertising rates set to their current levels working against the broadcaster if they tried to reduce the amount of advertising airtime they allowed.
In addition to the new regulation removal, Ofcom also announced that conditional selling which includes selling airtime from several different channels at once in a package will also be allowed for the first time.
Most sources from media agencies do not believe that the regulation changes will cause any market abuse problems because television ad sales already face pressure from CRR incentives and conditional sales. Ofcom will continue to review the evolving market to assess if the change in regulation has had a negative or positive effect.
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